May 28, 2006
Coming soon: Real Estate Bubble Reality Tours?
Looking for our latest research on bubble trends? We're getting ready to rollout our first experiments with bubble related maps, and need your help. Are there questions you'd like answered or data presented to help you make sense of the changing housing market? If you're thinking of buying a home, would you be interested in getting beyond graphs and statistics to participate in a Real Estate Bubble Reality Tour? If so, would you prefer to do that (1) on your own "virtually" using interactive maps, (2) your own driving tour, or (3) a small group tour of different towns with other househunters?
In the meantime, you can begin your own tour online by visiting fellow bubble bloggers:
MassHouseMarket some excellent graphs on the relationship between housing inventory and housing prices, and
BostonBubble.com has a rolling list of local bubble related stories, as well as their analysis of April housing statistics. Thanks for their permission to reprint their graph of Median Price changes, February 2004 - April 2006 above, and please visit their blog for more detail and reader forums.
May 26, 2006
Newspapers + FSBOs + fee-for-service = consumer savings
When Jeff Jarvis of BuzzMachine wrote, "Tribune Company just bought ForSaleByOwner.com. That’s a bigger deal than it may appear in the rearview mirror" wonder if he was aware of these stunning statistics? In less than a year, the online real estate section of The Boston Globe has seen pageviews rise from seven million to nine million per month, and property searches rise from one million to three million per month.
Nearly as impressive, Boston.com's real estate section has over 150 user generated forum topics. What that tells me is that newspapers, at least the one here in Boston, are trusted middlemen in the real estate industry. Realtors would love to position themselves as "Someone You Can Trust," the title of one of their new spots in a $23.2 million television advertising campaign to enhance their brand name.
Unlike listing agents, who have a duty to offer a range of fiduciary services to their clients, the Tribune is going into the FSBO business -- not the brokerage business as Jarvis recommended a decade ago. If smart FSBOs already advertise in their local newspaper, an obvious best practice recommended a year ago, how will that be different from placing an ad in a FSBO website owned by a newspaper? My guess is that the newspaper owned-FSBO website will bundle a variety of financial incentives to consumers, and sell buyer and seller leads to brokers for a referral fee. Otherwise how will they recoup their potential lost revenue? Do the math: ForSaleByOwner.com listing packages start at less than $90 per month, or $249 until the property sells. Compare that to the cost of a print ad in The Boston Globe: it's nearly impossible to write a meaningful print ad for less than $150, and arguably it to be effective, it needs to appear weekly.
If there is a financial upside here for the Tribune, it appears to selling leads to the brokerage community, something newspapers traditionally have not done. That's changing. In July 2005, Classified Ventures, a joint venture of leading newspapers including the Tribune and Washington Post, acquired HomeGain.com,"the #2 leading website in the real estate industry" with 4.5 million monthly visitors.
But one needs to ask where is the financial upside for home sellers? If Boston.com already generates three million property searches per month and delivers nine millon page views, do FSBOs really benefit from being sold to a full-service or flat-fee listing agency
who will put them in the MLS if it costs them half or full commission? Or is advertising on sites like Boston.com and purchasing advice "as needed" for an hourly fee from a new generation of fee-for-service real estate
consultants a better value?
May 16, 2006
Topic cloud for strategic planning issues in real estate
Posting this message from the blog room at the National Association of Realtors midyear convention in Washington, DC hoping some other industry innovators see it and decide to "meet-up" here sometime in the next 48 hours. Also, hope others are interested in exchanging insights into promising new innovations in the blogosphere, like the topic cloud on RealEstateBlogSites. Wonder what a convention topic cloud would look like if people were posting live from the conference?
This could be an interesting experiment: how about creating a topic cloud of issues covered in the NAR Strategic Planning Committee meeting earlier today? That was a private meeting, by invitation-only, but it wouldn't be hard to use blogs to speculate about the kinds of issues the industry and real estate consumers will face in coming years. One good jumping off point for that discussion is Stefan Swanepoel's report, Top 15 Real Estate Trends: 2006/7. Or you can just jump in anywhere you like by posting a comment below. What are the top 10 issues real estate professionals will face in the next five years? How about the top 10 issues real estate consumers face? Are they the same, or different? If the latter, why?
May 04, 2006
Call for Real Estate Consumer Bill of Rights: 5th Anniversary
Five years ago this week, a coalition of leading real estate consumer advocates nationwide -- including buyer agents, fee-for-service consultants, and for sale by owner publishers -- cosigned an petition calling for a Real Estate Consumer Bill of Rights which Consumer Union, publishers of Consumer Reports, echoed in their testimony in Congressional hearings on banks as brokers:
"We also call on Congress to hold hearings on the real estate marketplace. ...Are consumers being treated fairly by real estate brokers? Are commissions priced fairly?" asked Consumers Union legislative counsel Frank Torres during testimony May 2nd before the U.S. House of Representative's Committee on Financial Services Subcommittee on Financial Institutions and Consumer Credit.
"Perhaps what we should be talking about is a Real estate Consumer Bill of Rights."
Bloggers, consumer advocates, and real estate innovators -- not to mention the US Department of Justice and Federal Trade Commission -- are renewing investigations into competition in real estate with a new urgency fueled, in part, by discrimination against flat-fee MLS listing services and their customers, plus industry-supported efforts to establish minimum levels of service for brokerages in an increasing number of states.
Homeowners trying to sell "for sale by owner" also face subtle and overt forms of discrimination, as do homebuyers using alternative real estate business models. If you've been a victim, we'd like to hear from you privately at RECafe@mac.com.
Congressional hearings or not, doesn't it make sense -- as it did five year ago -- to ask regulators and other public officials to begin talking about a long-overdue Real Estate Consumer Bill of Rights? Last October, The Real Estate Cafe began blogging about individual articles, and would be glad to restart that discussion before the National Association of Realtors Midyear Legislative Meetings in Washington, DC, May 15-20, 2006. We invite your comment below; on our record a podcast line: 617-876-2117; or if you're really interested in getting involved, our wiki.